South Florida residential sales plummeted in April. May was worse
Residential sales plunged in Miami-Dade and Broward counties in April. But that was just the beginning.
The total number of single-family homes and condos sales dropped over 50% for both counties when comparing May 2020 to May 2019, according to the Miami Association of Realtors. The May report followed a dismal April, when activity dropped 40% from April of 2019.
Blame the pandemic, Realtors said.
“In March, Florida shut down. People were fearful. We saw a rapid decline in activity. May’s closing tracks those sales written in the height of the COVID shutdown,” said Mike Pappas, CEO of the Keyes Company. “When there is uncertainty and confusion people do not make decisions. Now that we are seeing clarity, that we have to live with [the pandemic], there’s more action.”
The June sales numbers will likely be flat or slightly stronger, he said. “We are optimistic about tomorrow’s business because we’ve seen an increased number of contracts written today.”
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Miami-Dade
The total number of home sales fell by 54%, from 2,796 in May 2019 to 1,297 in May 2020. Activity fell by 45.8% for single-family homes and 60.9% for condos.
The inventory of active listings dwindled by 16.2% for single-family homes, from 6,759 in May 2019 to 5,665 in May 2020, and by 7.5% for condos, from 15,893 to 14,705. Sellers benefit from the tight single-family market, with only 5.4 months of supply. Buyers have the edge in the condo market, which has 13.8 months of supply. A supply of six to nine months is considered a balanced market.
Sales activity likely will increase for condos, especially for those priced above $1 million, said Jay Parker, CEO of Douglas Elliman’s Florida brokerage branch. “Condo boards have become smarter and understand how to mitigate safety concerns. ... We are seeing a lot of activity for condos and I believe interest will remain strong. Buyers are attracted to the turn-key and easy-living aspects that come with a condo, especially if someone has multiple homes.”
Interest is coming from Los Angeles, Chicago, New York, New Jersey and Boston. “We are seeing similar activity in our other markets, in particular Connecticut and Long Island. People are leaving the metropolitan cities.”
Median prices moved higher. Single-family homes saw a 4.4% rise from April 2019 to April 2020, from $360,000 to $375,714, while condo prices swelled by 7%, from $243,000 to $260,000.
Sales closed near listing prices — at 95.6% of listing price for single-family homes and 92.9% for condos.
All-cash transactions dropped from 36.2% in May 2019 to about 25% in May. The national average is 17%.
Broward
The total number of home sales declined by 54.7%, from 3,376 to 1,529. Transactions for single-family homes dropped by 51% and by 58.3% for condos.
“We all expected for May to be our worst month since the pandemic. It was expected and occurred as predicted,” said Cynthia Benchick, co-owner and managing partner of Charles Rutenberg in Fort Lauderdale.
Single-family homes sales are expected to outpace that of condos for the following report, Benchick said. “Interest for single-family homes is still going to be higher with people working from home, a dedicated space needed for children with at-home schooling and in-house caretakers for the kids.”
The inventory of active listings for single-family homes dwindled by 18.4%, from 5,835 to 4,762, and by 0.9% for condos, from 8,310 to 8,234. Inventory favors sellers, with 3.9 months for single-family homes and 6.5 months in condos. A supply of six to nine months is considered a balanced market.
Median sales prices grew by 0.7% for single-family homes when comparing May 2019 to May 2020, from $370,000 to $372,500. Condo prices suffered — prices dipped by 2.8%, from $180,000 to $175,000.
Single-family homes sold at an average of 96% of listing price; condos averaged 94%.
Approximately 29% of all transactions were in cash, down from 33.1% in May 2019. But a month-to-month comparison shows an uptick, Benchick said. There were 109 all-cash sales in April 2020 and 144 all-cash sales in May 2020 in Broward County.
“All cash deals are indicators of investment activity,” she said. “This shows that investors swooped in.”
